GRAND RAPIDS — John Van Singel, former president and CEO of OAK Financial Corp. and its subsidiary, Byron Bank, has joined United Bank of Michigan as vice president of business development.
Van Singel took the position at United Bank on July 31. He said his responsibility will be to spearhead the establishment of United's ByronCenter office on Byron Center Road and work the southern district of the bank's trade area. Van Singel said the project site plan awaits the township's approval but that the new branch is tentatively scheduled to open in spring 2007. He told the Business Journal he was attracted to the position with United just for the chance to get back into banking.
"I was a competitor of Art (Art Johnson, United Bank chairman and CEO) for a long time and always respected his bank," Van Singel said. "Art had this branch coming up and knew I had deep roots in that market area, so he made me the offer and I accepted. I'm glad to be back."
Johnson said in a prepared statement that Van Singel is an ideal addition for the bank's community banking philosophy.
"John Van Singel is and accomplished community banker," Johnson said. "He lives in the ByronCenter community and is well-respected. It is always our philosophy to enter communities in which we can play a vital community role, so John's decision to join us helps to achieve that objective."
The Van Singel family has held shares in OAK Financial Corp. for more than 50 years. John's father, Willard Van Singel, started working for the bank formerly known as Byron Center State Bank in 1938 as a teller and janitor, and rose to become president of the bank in 1967. John Van Singel joined Byron Center State Bank in 1974, was promoted to president and CEO in 1990, and stepped down in October 2002, stating a desire to pursue other interests.
In December 2004, Willard and John Van Singel sent a letter to some of Byron Bank's shareholders expressing concern about the bank's management and future direction. They maintained that in recent years the bank had moved away from the community banking model toward a model better suited to a large, broadly-based financial institution. The Van Singels expressed concern about what the shift meant for the bank's future and claimed management had grown "increasingly 'top-down' and 'top-heavy.'"
Seven months later, on July 26, 2005, the Van Singel family entered into an agreement with Royal Securities Inc. to sell all of the shares of the company beneficially owned by Willard Van Singel, John Van Singel, Linda Van Singel, Willard Van Singel Trust and Van Singel Holdings. Collectively, they own some 272,696 shares, or nearly 15 percent of OAK Financial.
According to the original agreement, the total value of the consideration they would receive would be no less than $58 per share based upon 2,034,691 shares outstanding and adjusted on a proportionate basis for changes in the number of shares outstanding from time to time.
Broker Greg Dodgson of Royal Securities' Kent King Securities Division has control of the stock for another 60 days or so. He's currently trying to sell at $54 a share, which is above market price, so he's trying to get a premium.
"Whoever would buy this stock would probably be interested in buying the whole bank," Dodgson said. "The $54 price would be a hard number for anybody at OAK Financial to refuse if the other shareholders are given the right to be bought out at $54 per share like the Van Singels. If someone doesn't come in and show interest, I would probably advise them to terminate the agreement. The stock is still in their names, and they have the voting rights; it's their property. I just have the stock tied up in a lock-up agreement for a period of time."
John Heine, a spokesman for the Securities and Exchange Commission, said he's not aware of any kind of regulation that would prohibit a former president of a bank from holding onto shares of his former company after joining a competing bank. He said that by and large, SEC regulations focus on disclosure of information rather than on what companies or individuals can and cannot do.
"There are all sorts of other possibilities though; there are contractual agreements between employees and companies and different things can play into those," Heine said. "We require officers, directors and 10 percent holders of securities in a company to disclose their holdings and changes in their holdings as long as they are affiliated with the company, so there might be some disclosure requirements in that type of a situation."
Jose Infante, former president and CEO of Muskegon-based Community Shores Bank Corp., which he helped found, continues to hold shares of CommunityShores even though he joined Independent Bank West Michigan in June to serve as senior vice president in charge of business development. Infante owns nearly 40,000 shares of common stock in CommunityShores that he holds either directly or in his IRA and 401(k). He said he plans on holding onto the stock and that he has no agreement with CommunityShores that would prohibit him from selling his shares if he chose to. He acknowledges that ownership of the stock might appear a little awkward given that he left CommunityShores only two months ago.
"I believe my upside is some time in the future," Infante said. "I have options to exercise, which I'm going to exercise. I have to hold those for a certain amount of time for tax reasons. So part of my deal is really an issue of taxes. For me to sell my stock right away would hit me tax-wise, and I don't want to do that. My thought process is that, going forward, either the stock will do fine or the bank will be sold and I'll make money that way."
Infante said that holding onto the stock is not an expression of his confidence in CommunityShores' performance. At Independent Bank he's actually competing with CommunityShores and taking business from them, he added.
"It's more a question of risk level," he noted. "Banks don't go under. I need to hang onto my shares for a certain amount of time so when I get ready to sell them, I have that capital gains issue out of the way. I'm just doing what any investor would do."